UK: Family And Enterprise: Getting The Best Out Of Both

The majority of 'enterprises' (encompassing businesses, other investments and philanthropic ventures) around the world are family owned and controlled, and yet despite the clear appeal of the family enterprise model, not every family and enterprise work well together. Sayings such as 'clogs to clogs in three generations' have arisen from the prevalence of families that manage to destroy their enterprise over time, and I've seen countless families fight over their assets and demonstrate how a shared economic interest can really put family relations under pressure.

To make matters worse, family enterprises often suffer from reciprocal effects – if family relations aren't good, then the enterprise suffers, and if the enterprise isn't doing well, then the family suffers. It's therefore vital to nurture both in tandem in order to achieve long-term family enterprise success. Many business families find taking this perspective difficult in practice however – they know how to manage and grow a business or their investments successfully, but are not clear about how, in tandem, to manage and grow the family successfully.

A typical mistake, is simply not putting enough work in to developing the family. What they fail to realise, is that creating long term family harmony and success in the context of a family enterprise requires hard work; different work requiring different skills to what is needed to build and grow the business, but work nonetheless. Just as time should be put aside for the business, you also need to put aside time for the family. In some larger business families this translates into their governance structure –using a family council to deal with family issues and a family holding board to deal with business issues; but smaller families need to carve out dedicated 'family time' too.

Here are my key considerations for getting the best out of both family and enterprise:

• Put aside proper time and space: Creating long term family harmony and success in the context of a family enterprise requires a significant effort: dedicated time needs to be set aside for building and growing the family as well as the enterprise
• Be a strategic family: Once time has been set aside, families need to define what success looks like to them. Work can only begin once families can answer the basic questions: What sort of family do we want to be?' What sort of enterprise do we want to own? Once these questions are answered plans can be made and work can begin. Let's say that you want to be a close family, an entrepreneurial family, a supportive family – you can define what this means in practice and then agree a plan. In my experience people tend to find this intentional approach quite alien to begin with, but it is no different to a founder saying that they would like their business to be innovative, or socially conscious. The bottom line is that in a family enterprise context family & enterprise are inextricably linked and you need to be just as purposeful with your family as with your business.
• Being deliberate is key: If you don't want family relations to get in the way of commercial success, talk about it, get it out in the open and work on it (preferably before any problems arise in the first place!).

Finally, keeping in mind the above, families should continually review their progress and measure themselves, asking questions such as 'how are we doing as a family?', 'how is the business performing?' and 'what could we be doing differently?' Being alert to the importance of nurturing the family as well as the enterprise is the first step, but acting on it in a continual, adaptive process that suits your particular family and enterprise is the real key to lasting family enterprise success.

Some Questions to consider

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